mark: from bloomberg world headquarters in new york, i'm mark crumpton and this is "bottom line," the intersection of main street and wall street with it -- the to those of you joining us around the world, welcome. we have full coverage of stockton stories making headlines on this monday. shelby holliday has a report on business recovery in ferguson missouri where racial tensions led two days of rioting last summer. we begin with bloomberg's chief washington correspondent, peter

cook, with more on today's talks between president obama and german chancellor angela merkel. good afternoon. peter: good afternoon, mark. striking a united front today at the white house and criticizing russia for destabilizing the ukraine, even as they may disagree on the next moves to come to get vladimir putin to change his policy, most notably providing more military for the ukrainian government. high-stakes meetings behind closed doors for both leaders. ukraine dominated the conversation, but there were other topics as well. angela merkel thing she cannot guarantee her push for a cease-fire will be successful. but she feels like she has to try. they both said a military solution to the crisis in ukraine is not possible, and even the merkel objects, the president said he had not yet decided whether or not to provide legal defensive weapons to ukraine, as members of both parties of congress have been asking to do. take a listen. president obama: it is true that

if what we are doing right now fails, i have asked my team to look at all options. what other means can we used to change mr. putin path oculus? and the possibility of -- mr. putin's calculus? and we have not made a decision. chancellor merkel: you may rest assured that no matter what we decide, the alliance between the united states and europe will continue to stand, will continue to be followed. peter: again, displaying the united front. the president said they could have tactical differences going forward.

that unity, mark, both of them saying a critical component in the push against vladimir putin. mark: if not more weapons for ukraine, then what? peter: they have talked about keeping sanctions on the table and further ratcheting of sanctions against russia. the president said they had a measurable impact on the russian economy and there could be more pain to come, more cost for vladimir putin down the road. and just the merkel said the same thing. if anything, the germans would like to go that route before the talk of weapons comes back onto the table. the question is whether the president will wait that long and how much time he will give angela merkel to try to get a writ -- a peaceful resolution to this. mark: the president was also asked about the situation in greece -- the chancellor was also estimate the situation in greece. how did she respond? peter: you could see the

discomfort in her face and the efforts to walk away from austerity measures in place. she said, listen, if the greeks want to talk, they have to put something on the table to begin negotiations. the basic framework in place now made make the starting point for negotiations. mark: peter, thank you so much. john lipsky is a senior fellow at the johns hopkins senior farm policy institute and a former first deputy managing director for the international monetary fund and he joins me in studio. dr. lipsey, welcome back to bottom line. john: good to be here. mark:, we were just talking about -- mark: we were just talking about the situation between ukraine and russia and world leaders trying to navigate that. they will hold talks in belarus beginning on wednesday. ahead of the negotiations, the european union decided today to does -- to hold off on imposing more sanctions. our diplomatic efforts working

echoed are the sanctions working? -- are diplomatic efforts working? are the sanctions working? john: many believe it is keeping russia from obtaining funding from abroad. it is computing to the russian economy weakening. right now, russia is looking at a recession this year. mark: peter also mention that chancellor merkel was asking about greece -- was asked about greece, and perhaps she did not want to get into that. germany is the biggest european contributor to greece's bailout, so the germans have been consistent that anti-austerity measures must remain in place, whether there is a new government or not. does greece have clear negotiating strength when it comes to changing the discussion about the terms of debt relief?

john: in practical terms, greece is in a very precarious position financially, because their banks are very much dependent on financing from the european central bank. and the country at this time, it would find it very hard to raise money in the international markets. so the success of negotiations with the so-called troika of the european union, the european central bank, and the international monetary fund will be crucial. and that is still forthcoming. mark: dr. lipsky, bloomberg news obtained a draft from the g-20 meeting underway in his dental. he did not mention the greek debt crisis. does that surprise you? john: not really. the g-20 members represent 180% of the voting power in the imf and given that the imf is deeply involved, they will have a say .

but right now, i don't think the g-20 wants to insert itself in a situation in which greece is not a member and not involved director. mark: the finance minister of greece said -- the finance minister said it is important to work while vertically -- cooperatively. does that mean you have to stick to the terms of the agreement that was come up with before the new government was sworn in? john: i don't think that's the idea. anything constructive engagement on both sides. the european position has been so far that greek authorities have not put forward a concrete plan on what they would like to see changed. in the meantime, they have a set of obligations if you will, policies that were agreed with the troika for 2015. mark: last week, the imf chief, christine lagarde, was talking about the situation in the eurozone. she said she would call for a decisive push for structural reforms. is that something that the finance ministers are pushing?

are they pushing hard enough for that to happen? john: structural reforms are very much a key element of the agreement between the troika and the greek authorities. the idea is to try to improve the competitiveness of the greek economy that is at the heart of their economic weakness. the issues on austerity and financing are really issues just that, short-term financing issues. the real heart of the issue are the structural reforms producing improved competitiveness. that will be -- that will have to be discussed. are they going to carry through on those elements? mark: it's one thing to be a candidate and then another to actually govern. mr. suppress when he was running for prime minister -- mr. sipras 20 was running for president -- mr. sipras, when he was

running for president, he said he would change the dynamic. has that reality sunk into the office that they are probably not going to get much relief? john: they will have to enter some real discussions and negotiations. the european authority among the troika, gave very large-scale funding to greece at a time when no one else would. and moreover, because the terms are so favorable, debt payments by the greek authorities are only about 2% of gdp, which is relatively low. the greek authorities seem to be saying that what they want first of all, is more lending i.e. more debt. i think they will have to have brought discussions on concrete policies here. mark: john this is senior fellow of the johns hopkins university, former first deputy of the -- and managing director of the imf. good to have you on. let's get you top stories is monday. we are getting word on some

breaking news, standard & poor's ratings services made a call of saudi arabia, the outlook going from stable to negative. falling oil prices there for the first time since june and we are paying more for gas. the average price of regular gas rose almost $.13 in the past two weeks to $2.20 per gallon. prices are still more than a dollar lower than they were a year ago. a startling study about the price of oil according to citigroup, crude prices may fall more than 50% in the next two weeks to $20 range. the reason, oversupply of oil is putting oil things for storage to capacity. and there has been a slowdown in drilling. oil supply will roll only half as fast as it did last year. more on opec and oil coming up later on "bottom line." as we been discussing, greece is on a collision course with its creditors with the rejection of the international bailout.

>> the new contract between greece and europe, will plea -- which will be reflected in a midterm plan for reconstruction will respect the eurozone rules for reconstruction, but will not reflect irrational and unreal surpluses, which is a new word for austerity. mark: mr.tspiras also saying they are playing with fire. european finance ministers are meeting on wednesday to discuss giving more money to greece. up next, the latest world news. and later, the 2015 grammy awards are in the books. who were the big winners? decide sam smith, of course. -- besides sam smith, of course more on that in just a moment. ♪

mark: it is 15 minutes past the hour. let's check bloomberg world news this monday. there are reports that boko haram have kidnapped more than 30 people in northern cameroon. fighters have completed their attacks outside nigeria striking multiple times in neighboring cameroon and niger in recent days. neighboring countries are planning a military effort to subdue the group, which is claimed -- blamed for doing 10,000 in the past year. auditing some 2300 account holders named in secret papers that outline how hsbc bank

helped the wealthy dodge taxes. the comment came after $120 billion in assets were analyzed by investigative journalists in france england, and elsewhere. according to people with knowledge of the situation with ubs, investors want to know if ubs misled client investment. it is more about whether the currency market has been manipulated. the 7.5% increase in the october-december timeframe in india. government economists are questioning the growth surge because the way gdp is catholic and aiming cap has changed -- is

calculated in india has changed. we will have another update in about 30 minutes. coming up promoting albums to streaming to renting music, we will look at how music has changed in the digital age. ♪

mark: later today, a bloomberg exclusive. federal governor j power will be -- jerome powell will be interviewed. that is coming up at 5:30 p.m. new york time on "taking talk." -- "taking stock." jeb bush has a slight lead over his republican rivals. that is according to a recent

poll. he was backed by 16% of those surveyed, followed by rand paul and governor scott walker. new hampshire holds the first primary. 25 million viewers tuning in the grammys bus night. the broadcast highlighted how big, live events still ruled the airwaves. analyst and director of research at bloomberg, paul sweeney joining me here in studio. good to see you. let's talk about those numbers from last night. as expected, a big hit for cbs, but still down from last year. why? paul: they were slightly down, but still good numbers over the competition any day of the week. a competitive threat was "better call saul" something that was widely anticipated. a big night for cbs and for the

music industry. it goes to show you how no matter how the music industry changes, this is still something there is a lot of interest in. mark: and live events, whether music or sporting event, have advertisers figured out that even though people could probably take it and watch it later, they would still rather sit at home and watch it live? paul: yes, we see this more with choices for video. it is not just broadcast tv netflix or other programming. there is still a huge audience for the live event. super bowl, for example, the oscars, the grammys, some of these events that still put together 20, 30, 40 million homes are more in cases of the -- or more in cases of the super bowl. advertisers are intent on reaching that audience. mark: paul, as you alluded to,

people consume music differently than they did five or 10 years ago. consumption habits might change, but the value and importance of music still revealing it tell. should these shifts have changed things? paul: i think what we have is we have gone from where you owned it down, a cd even but then it became owning just individual songs through apple's itunes. now with some of these streaming services, consumers are not just -- are not owning music that much anymore, but just renting it. it is a different economic model . it's a different model for what defines a breakout hit. but still, people are paying for music. but it is incumbent on the music business to make sure they are paid every step along the way. they made some big mistakes on apple came on in they lost some pricing control, but they are wanting to get it back. mark: where is the art for

something like the grammys when this translates not so much sales of their music, but when these artists to he -- when these artists tour? jump -- are we seeing a big jump in the box office? paul: yes, if you are a big artists like the rolling stones or youu2, you don't make much on the cd. it is in devices you to go out and make money on the road. mark: sam smith has now 122. w --on 22. -- sam smith is now only 22. i was shocked. he seems more mature and more business savvy at the age of 22.

maybe he started when he was 12. paul: i thought interview where he's really had to change the way he makes music and some of the people he works with to find the right commercial makes. judging by last night, he has found that right makes. mark: is this a curse? some rappers save could be, because then you might lose the streak read. some people think you went to mainstream --too mainstream. paul: it depends on the music you play, but if you are backed by a good agent you should be able to translate that in front of a big audience into some success. mark: never mentions of domestic violence and other recent issues. if you are not as and millions

-- if you are an artist and millions will be tuning in think of the temptation. think about george sees got when he sent a native american woman of their two get people to -- george c scott when he sent a native american woman up there to get people to think about the plight of native american people. paul calls -- call: at least there was not a wardrobe malfunction last night. there were some different issues and it was a bit somber, but it is kind of their prerogative when they get these 15 to 30 seconds to say there thank you's. -- their thank you's. it is an investment and it keeps paying off for cbs. mark: did anybody say to tone it down? paul: nobody did. it is the number one watched network for the past 10 years. cbs goes for the biggest audience not necessarily the

youngest audience, but the biggest. mark: paul sweeney, appreciate it. up next, opec to reaction setting is forecast. bottom -- "bottom line" continues in just a moment. ♪

mark: welcome back to the second half hour of open bottom line" on bloomberg television. i'm mark crumpton in new york. thank you for staying with us. sales keep falling at the world's largest restaurant chain. same-store sales at mcdonald's fell 1.8% last month, worse than expected. mcdonald's has already announced it will replace ceo don thompson. japanese automaker nissan has raised its profit forecast for the year. nissan is been helped by a weaker yen and a stronger demand in the united states. that may help the company offset

the impact of a recession in russia and slowing growth in japan and china. it was no-go for an unmanned falcon rocket from elon musk spacex corporation. the planned launch in florida was grabbed minutes before liftoff because of problems with the air force radar designed track the flight. spacex will try again tomorrow. that is a look at the top stories we are following at this hour. let's get to the price of crude oil as floor trading comes to a close here in new york. new york crude is up about 2.5% $52.96 per barrel. opec has cut its forecast for countries outside the group. the cartel says a cross route -- price route means u.s. rulers will have less than anticipated. tom petri joins me from denver, colorado. mr. petrie, thank you for your time. tom: good to be here.

mark: it is estimated that non-opec countries will pump about $400 million -- 400 million barrels per day less. what will this mean for the short-term? tom: well, it still growth, and we've got more than we need. it's on the margin into beating the surplus. and i think in general it will keep oil somewhat pressured. i would expect to trade in the 50's and possibly below yet again as we go into the spring. mark: our oil prices now starting to show signs of prices bottoming out? tom cole and it looks that way but he could be deceptive. there is a seasonality -- tom: it looks that way, but it could be deceptive. there is a seasonality to the prices. we've got some big offshore deepwater project yet to come on

, and those are different from these unconventional projects. no question, we've laid down a lot of rakes, and that will stretch out the unconventional -- a lot of rigs and that will stretch out the unconventional approach. mark: opec decided not to raise its prices even as the price was falling. did the cartel decides not to pass the buck onto american drillers? tom: that is one interpretation. it was definitely their desire to have a price reaction that would reduce the rate of growth. last year, the u.s. grew by well over one million barrels per day probably 1.2 million, 1.3 million. and the global growth demand was only about 800,000 or 900,000. there was a progressive surplus created. this year, if you cut the

progressive growth in half, you will still be up by about 600,000 to 700,000 barrels per day. and that growth will still be a challenge for opec and everybody else who is producing oil. mark: i'm speaking with tom petrie joining me from denver. our opec and saudi arabia in charge, or is the -- are opec and saturday via internet, or is the market in charge? tom: there are those that believe we will break $30 to -- $40 to $30 per barrel. the more progressive it will become, the lower level we reach. when we get to the low levels, that is when we put in the bottom in my view. we may have put it in, but i don't think there will be a big ounce to come from here. if we go even lower, we will get a more powerful self correction.

mark: what about opec members that are having trouble balancing their budgets? what dollar per barrel must they have to stay profitable? and how much pressure will that put the cartel under to act decisively you -- decisively? tom: each member will act differently. but you have touched on an important point. venezuela nigeria and iran are all sensitive to these low prices. it's hard to see the first two of those navigating 2015 without some kind of debt default or major restructuring of their financial house. mark: if there is some sort of that default or major restructuring, talk to me about the ripple effects. what happens? tom: there are many unintended consequences. we don't know it all. in the case of venezuela, it is arguably the most vulnerable.

they will insist on repayment and barrels of oil at a bargain price. venezuela is the most vulnerable to becoming an economic colony of china if you will. mark: what about some of the other geopolitical events causing tension in the markets you go there is russia and ukraine, the middle east, slope roads in europe. -- slow growth in europe. how is that affecting strategy? tom: it is more indirect, but definitely there. to the degree that we continue to have problems are chaos if you will, in the ukrainian situation and it brings on more sanctions, then the unintended consequences of how russia deals with it become a big concern. whether it is military or some other inducement of distractions and chaos becomes highly motivating. and that is genuinely a concern.

that is a big reason you see real efforts on the part of germany and the u.s. today to avert the worst outcome in terms of what is going on in ukraine. mark: i want to ask before you go, the north american production response to oil prices, how would you describe that? tom: this is capitalism at work. capital has been reallocated and trimmed back. if we go forward to 24 years and look back -- to-four years and look back at how surprisingly unviable the revolution continues to be, because surprisingly, is not much better than it is here when you take into account basis differentials and capital intensity. i think we will see north america do all right, but at a slower pace. mark: tom petrie is with petrie

partners out of texas. he joins me today from denver, colorado. thank you for joining me today. up next, the petrobras scandal affects approval ratings for recess -- rousseff. ♪

mark: welcome back. it's time for today's latin america report. brazilian president recess's approval rating is at a low. president rousseff was rated good or very good by just 23% of respondents, the lowest level since she took office in 2011. most poll respondents said they thought president rousseff was aware of corruption at petrobras as it was happening, even though she had publicly denied

knowledge of the matter. coming up, former fed chairman alan greenspan says it is just another -- a matter of time before greece exits the euro. ♪

mark: it's 45 minutes past the hour, let's check liberal news. the head of russia's central bank that she is unlikely to change interest rate cuts as she expects the economy to slow. she employed that she plans to employ a range of ideas to stabilize the ruble and the economy. >> no budget policy can create stable, economic growth. >> l virus -- mark: she also said she has a lot of respect

for the former u.s. fed chairman who is able to achieve a declining inflation while guiding the u.s. through a difficult economic time. in ostrow, -- in australia tony abbott has survived a challenge to his leadership. lawmakers from his own party voted against a motion to unseat him. support for him has bundled -- has dwindled. we will have another update in about half an hour. it has been exactly six months and michael brown's death and authorities are stepping up efforts to identify and charge protesters who ravaged ferguson missouri. fran and asked -- of violent acts against businesses. we travel there to see how business owners are picking up the pieces.

>> this is how the world knows ferguson, missouri. six months after the death of michael brown, protesters have retreated and news crews have gone home, but the destruction remains. >> eventually, the community will dwindle down until it is nonexistent. it's important for business to remain in the community. >> some owners are slowly reopening their stores, but not without personal sacrifice. but i took a big dip into my savings account and i'm renting the space. it's all on me. >> one business owner had to rely on his own cash and a $10,000 loan to cleanup smashed windows and convince customers to return. after months of hard work, his boot camp is back to full capacity. >> we are changing one pound at a time. my people it's that me to be open. -- my people expect me to be open.

>> and another is relocating her tax-preparation business to a storeroom because her trailer has been condemned. >> you know how much this cost you? >> they cost about $20,000 to open initially and in to do this again to about $32,000. >> the impact of racially motivated riots weighs heavily on communities. according to research, in the aftermath of the rodney king riots to my social catastrophes can cause more long term damage than a black -- a natural disaster. in the decades after those rights, they lost almost $4 billion in taxable sales. ferguson's mayor james knowles canceled our interview and refused to speak to us directly. but his spokesman sent as a statement saying city staff are working closely with business owners and the community. but some in the ferguson area they support is not coming fast enough. >> the response is very slow.

it has hurt business. >> i hear absolutely nothing from anyone. we're the ones who were affected. they need to come out and make themselves known. come to me and say, hey, what can we do to help you bring your business back? mark: shelby joins me now from the newsroom. your piece points out that long-term rates rise can be worse for the economy than natural disasters. what does ferguson need to get back on track cap: shelby: -- to get back on track? shelby: more investment never hurts. but simply putting money back into a committee is not enough. community relations, strengthening the community is key. and i spoke to christine cole of the crime and justice to it and she said government and region is important that government outreach is important, but they need internal motivation -- government outreach is important, but they need

internal motivation. if citizens go out and have a greater say in their government and are more engaged in a community, there will likely be more trust between this unity and the government, and that could put ferguson on the path to healing. mark: shelby holliday reporting. thank you. former fed chairman alan greenspan says greases exit from the euro -- greece's exit from the euro is only a matter of time. trish regan jointly with more. you've got g-20 finance ministers meeting in istanbul and angela merkel saying greece needs to stick with its plan. and then you have the greek prime minister saying we need to renegotiate this. trish: he wants the troika to demand off -- to drop austerity demands because their economy is struggling severely. but you've got to give alan greenspan credit, because he basically told everyone about the elephant in the room, which

is the reality that you just cannot have an economic union without a political one. and that really seems to be the truth, the be all end all here. let's listen to what mr. greenspan had to say. allen: i don't see it helps them and i certainly don't see that it helps the rest of the euro zone. it's just a matter of time before everyone recognizes that wording is the best strategy. trish: only a matter of time maybe before everyone recognizes that we were better off going this alone. either that, mark, or you say, ok, we will get everyone on board together and we will be in this together, which means we have one political unit. that is never really going to happen. i was speaking with german executives over the weekend and one of the concerns you hear regularly in germany from the sort of man on the street they point out that they don't like the idea of having to support the greek workers. in germany him a they say, much

like the u.s., you have a lot of wealth transfer that will happen in a taxation system. and there are sections of germany that are less prosperous. however, the germans don't mind supporting other germans. but when you are talking about supporting the greeks or the italians or portuguese, it starts to get much more complicated. alan greenspan making the point that this is probably ultimately not going to work. mark: coming up at the top of the hour, "street smart" and bill isaac. trish: we will be talking to about the commercial mortgage lending market and the stronger dollar and its impact on banks. bill eisen -- bill isaac is joining. we will be discussing what the future of ukraine is. mark: see you at the top of the hour. stay with us. another edition of on the market

on the chart on the other side of the break. "bottom line" continues in just a moment. ♪

mark: shares of american airlines are facing turbulent say after cutting his first quarter pretax margin forecast just two weeks after the airline unveiled its estimate. scarlet fu dig deeper into today's off the charts segment and she joins us from the breaking news desk.

scarlett: the question is, what prompted this change in american airlines? and the answer is, oil prices that have pushed jet fuel up by $.10 per gallon. we have seen shares lower along with delta and united, which are falling in sympathy. at the bigger picture is that u.s. airlines have benefited from the overall collapse in oil prices. and credit for today's chart goes to gary shilling, which -- who included it in his monthly report today. the white line tracks airline fares and 2004. it has had some jagged moves on a monthly basis. shares are basically near a love and. the yellow line is jet you'll prices. both heat in early 2008 and then collapsed in the financial crisis. beforehand -- the far right hand of the chart shows a divergent because profits have recovered even as fuel prices have plunged. you've got high demand, plus limited or constrained supply,

which equals a sweet spot for these airlines, giving them pricing power and record profits, even in an directly week fourth and first quarters. and who knows how long will prices will stay low? mark:, competition, especially internationally, is looming. how does that factor in? scarlett: that is a good point. passengers have many more options than just legacy carriers. and some are also adding capacity because delta is looking at this as more of a international gateway and needs to take advantage of that. but some -- but to some extent you wonder if the easy money has already been made in airline docs. if you look at the index of the overall market, since the start of the bull market, airlines have returned almost 560%. those are big numbers, but there is a differential of several

percentage points. mark: the legacy carriers that you just mentioned, they've also been griping about the white house is open skies policy. what is the latest their? scarlett: the ceos of american, delta, and united went to washington to lobby for the treaty that the u.s. shares with persian gulf nations. the argument of these carriers is that these carriers are trying to take market share from international carriers out why these home -- their home countries and getting subsidies to do so. adam minter, a columnist over at bloomberg view, writes about this. he says that u.s. airlines should quit whining about competitors. he writes, if delta and american are truly concerned about gulf carriers, they should be running to washington for protection. there is plenty they can do on their own, from reducing prices to improving mediocre service

to forming partnerships. i'm in favor of partnerships because i need an excuse to fly to the emirates. mark: it is surprising, because the pricing has not been passed down to passengers with the oil prices dipping. scarlett: no, not here in the u.s. mark: get the latest headlines on bloomberg radio and streaming on your tablet and on bloomberg.com. that is it for this edition of "bottom line" on bloomberg television. "street smart" is next.

trish: welcome today most important hour of the session. i am trish regan, this is "street smart." investors worry greece might be heading to a default. greece's new leader fueling concern about a confrontation with the nation's creditors. oil prices rising for the third day in the boosting energy shares. "street smart" start now. ♪ here's a look at some other top stories ahead of the c